Kerry Logistics kicks off joint venture with Central Asia partner

Kerry Logistics kicks off joint venture with Central Asia partner

Kerry Logistics is expanding its coverage of Central Asia through a joint venture. Credit: Kerry Logistics


Kerry Logistics has named the Dubai-based forwarder with which it has formed a joint venture as Globalink Logistics, a company that has operations across Central Asia’s Commonwealth of Independent States.

The partnership will add nine countries to Kerry Logistics’ global network as the Hong Kong-listed group expands its presence in the region to take advantage of growing connectivity and trade along China’s fast developing Belt and Road route.

Kerry Logistics announced in May that it was entering into a joint venture agreement with a forwarder covering the CIS countries, and only today named the company in a filing to the Hong Kong Exchange.

Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, Turkmenistan, Georgia, Armenia, Azerbaijan, and Ukraine will be served by the joint venture with Kazakhstan expected to benefit most from the growing cargo volumes. The giant Central Asian nation has established itself as a pivotal train switching point along the southern China-Europe rail route where the gauge of the rail track changes.

Block trains on China’s Europe rail networks typically carry around 40 FEU, transferring the cargo first at Kazakhstan’s inland port Khorgos Gateway to the different gauge lines and once again later in the journey.

William Ma, group managing director of Kerry Logistics, said the forwarder was developing an overland transportation network for road, rail, and multimodal freight services from China to Central Asia and Europe.

“The new partnership will allow the two groups to leverage each other’s competitive strengths and provide new options and cost-efficient multimodal solutions to our customers with greater flexibility and access to the strongest network in Asia,” he said.

Several global forwarders run regular rail freight services between China and Europe with mounting interest from shippers. The overland route has grown from an exotic alternative to air and ocean to a regularly requested transport option.

Kerry Logistics has been involved in the two longest train journeys on the route, sending 80 TEU by train in August 2016 from Yiwu not far southwest of Shanghai to Madrid in Spain, a journey that passed through eight countries and took 19 days.

In April 2017, Kerry Logistics supported a customer on the first train from London to Yiwu, an 18-day journey of 7,500 miles.

UK forwarder Davies Turner said it introduced a fixed-day, weekly rail service for less-than-container-load cargo to the United Kingdom from the Chinese rail terminals of Wuhan and Hefei at the beginning of 2017, the response from the marketplace has been good.

Philip Stephenson, chairman of Davies Turner, said the forwarder had investigated the practicalities of a rail freight service from China to the United Kingdom and Ireland for some time and conducted a number of trials in 2016 before officially launching the service in January this year.  

“We knew there were operational difficulties to overcome such as the transitions from standard to broad gauge track and back again, but we are confident that this has been achieved by our partners and the rail companies concerned,” he said.

"The big selling point is that the cost is around 70 percent less than shipping the cargo by air and 16 days quicker than getting it to destination by sea.”

China-Europe rail operator DB Schenker has taken the intercontinental service a step further, connecting Poland with Thailand via a multimodal road-rail solution. In a pilot shipment made in the third quarter of 2016, two 45-foot high-cube containers of dental care raw materials were picked up in the Thai town of Chonburi and were delivered to Swidnice in Poland.

The multimodal venture involved five days of trucking across Thailand, Laos, and Vietnam into China where customs formalities and rail container loading was done. Twelve more days were spent on the rail passage from Chongqing to Malaszewicze in Poland, before the cargo was moved via road to its final destination. Since the pilot shipment, 12 container loads have been shipped from Thailand to Poland for this customer.

Contact Greg Knowler at greg.knowler@ihsmarkit.com and follow him on Twitter: @greg_knowler.